MCLS.L WACC - Weighted Average Cost of Capital

The WACC of McColl's Retail Group PLC (MCLS.L) is 10.3%.

The Cost of Equity of McColl's Retail Group PLC (MCLS.L) is 11.25%.

The Cost of Debt of McColl's Retail Group PLC (MCLS.L) is 12.85%.

	Range	Selected
Cost of equity	6.90% - 15.60%	11.25%
Tax rate	17.90% - 21.90%	19.90%
Cost of debt	9.90% - 15.80%	12.85%
WACC	8.1% - 12.4%	10.3%

WACC

MCLS.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.48	1.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	15.60%

Tax rate	17.90%	21.90%
Debt/Equity ratio	29.02	29.02
Cost of debt	9.90%	15.80%

After-tax WACC	8.1%	12.4%


Selected WACC	10.3%

MCLS.L's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for MCLS.L:

cost_of_equity (11.25%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.